Category: Currency exchange

Back in 2008 when Bitcoin was first conceived and began making its entry into the world of currency, there was a great deal of speculation as to whether or not this digital currency could (or would!) take the power of finances away from central banks around the world that have always held the keys to wealth. Over the past 8 years Bitcoins have surged in value from their humble beginnings at a value of $0.01 per coin to over $1200 per coin in 2013 and then back down again to just about half that value where they are currently valued at. Even though this currency is highly speculative, there are those who question whether their slow dominance of the Internet is a good thing – or not. Here are some thoughts on the issue.

Difficult to Use without Being Valued against other Bitcoins

As a peer to peer currency that is really valued by supply and demand, it should also be realized that there are only so many Bitcoins that will ever be made. The supply is finite, which to some, gives them value because of the old ‘supply and demand’ rule of finance. When it comes to wagering on online games such as poker, it becomes difficult to use them as a currency because it is difficult to break them down into smaller units that can be used as a wager and also, hard for ultimate values to be assessed as the value is even more volatile than many of the leading currencies on the market. It is far easier to use a major currency against another major currency than it is a digital currency against a major currency. In short, they are not yet fully understood by the masses and computations are highly complex. Too complex for the average financial transaction online.

The #1 Concern – Digital Anything Is Open to Hackers

Then there is the concern that since Bitcoins are a digital currency, hackers can literally take over a person’s supply with no one being the wiser as they can also create bogus Bitcoins that may be passed as authentic. The current level of online security appears to be inadequate to keep up with the type of security needed for digital currency so the slow dominance of the internet in this regard is actually a good thing. The longer it takes for this particular currency to gain in popularity and use, the longer cyber security teams will have to find ways to secure sites that accept Bitcoin payment.

In the end, the faster anything at all gains dominance over a market, the quicker it can come tumbling down. When people like online gamers are wagering bets, the money they are playing with needs to have real value. There is nothing ‘tangible’ about an online game as there would be such things as ordering articles from an online merchant and with the hopes of winning, that money being wagered becomes all the more important. It’s just that – a wager, a bet. With nothing to say that other digital currencies won’t hit the market, lowering its value and no sure way to protect against hackers at this time, slow dominance is indeed a very good thing.

Bitcoin has created a whole industry and a new way of doing business that one could doubt even its maker never thought possible. From its days of obscurity to its fame and notoriety, Bitcoin today is among the most hotly sought commodities in the world. But is it the alternative every day currency that Satoshi Nakamoto hoped it will be? Let’s find out…

The Economics

Bitcoin in its present form faces serious challenges as it has retracted from being the cheap means of transaction to one that has become completely uneconomical for everyday transactions when it comes to micropayments. Bitcoin miners are allowed to set their own fees for verifying transactions and as such transactions with small fees attached to them often go for days without being verified as the miners don’t find them lucrative. It is estimated that it costs up to $24 to send about $10 in Bitcoin which is just not a feasible number for businesses and customers who wish to pay in Bitcoin

Speed or Lack Of In Transaction

A perfect everyday transaction money is one that moves fluidly and very swiftly from the paying party to the recipient in the least possible time. What makes credit card payments popular is the little time it takes to process them, and this is something Bitcoin in its present state cannot just compete with. Bitcoin is only able to process a maximum of 4 transactions per second which is just not enough for a currency that could potential have millions of people trying to conduct their transactions all at the same time.

Usability

One of the other indices for the use of Bitcoin as an every currency is the safety that comes with its payment. Bitcoin transactions are completely irreversible once initiated and as such it stands at a disadvantage when compared to Ethereum and other cryptocurrencies that allow for the use of Smart Contracts which protect both buyer and seller.

Value

When it comes to actual value Bitcoin stands heads and shoulders above any other blockchain product as it is several times the value of its closest rival on the market. The hike in Bitcoin’s value has seen the increase in the reluctance of its holders to spend it on their day to day transactions, preferring to hoard it, which is why a lot of people tag it as the digital equivalent of bullion gold.

Conclusion

With a very cumbersome transaction process and high fees, Bitcoin stands at a great disadvantage to fiat as well as other cryptocurrencies that offer more efficient service, but its high value makes it the best option for storing value as far as cryptocurrencies are concerned. Therefore if you are looking for a currency to pay for your pizza and ice cream Bitcoin might not be your best choice.

So a Miami judge has ruled that the digital currency bitcoin is not money in a money laundering case. The accused launderer was charged for selling $1,500 worth of bitcoins to undercover agents for use in buying stolen credit cards. There is mixed reactions to the ruling. The defendant, of course, is glad of the court victory but prosecutors are worried the judge set a precedent that would embolden criminals to wash dirty money with bitcoins.

Some 3,000 miles away in Suisun City, California, executives of WPCS International Inc. (Nasdaq: WPCS) received the news with keen interest. It may be odd since the company does not charge customers bitcoins for designing and building communications infrastructure and doing specialty construction, its main business. But the case and the ruling matter because WPCS owns BTX Trader LLC, which runs an online platform where bitcoins can be traded in multiple digital currency exchanges worldwide. The judge left bitcoin trading untouched making it business as usual for BTX Trader. WPCS is rated as a Strong Buy

BTX Trader’s Platform

The BTX Trader’s platform of the same name connects users to 14 bitcoin exchanges worldwide to retrieve market data and other users’ trade activity as well as to place trades. It has a built-in wallet called Celery that allows U.S. residents to buy bitcoin or dogecoin, another cryptocurrency, via direct bank transfers. BTX Traders earns from transaction fees from users. It also sells the wallet for the bitcoin equivalent of $99, $49.99 or $99.99.

The latest quarterly earnings report in March showed that operations in Suisun generated $286,000 in income for the fiscal 2016 third quarter and $886,000 for the nine months ended Jan. 31, 2016. The company’s only debt is a $150,000 vehicle loan and more than 96 percent of its $7 million assets are current assets.

Share Rally

With the recognition and use of bitcoin for paying goods and services growing, WPCS saw the opportunity of propping up revenues and attracting more investors by acquiring BTX Trader LLC in 2013. WPCS shares rose by a dollar from $1.51 to $2.53 before settling at $2 when the acquisition was announced in December that year. A share of WPCS is worth $1.52 as of July 26.

Shareholders were made aware of the many risks of the foray in the digital currency industry. One is the slowdown in the development of the Bitcoin network and reduction in the use of the digital money. There is also risk from the regulatory environment. The European Union is pushing for government access to bitcoin databases, identities of users of the virtual currency and users’ wallet addresses by next year to prevent terrorists from using bitcoins to fund their attacks. Such regulation could discourage bitcoin investment, though it is a recognition of the digital currency. There are also competing bitcoin trading platforms. But BTX Trader and WPCS welcome anything that heightens trading volumes of bitcoins.

Bitcoin pathway

The retail industry is slow in adopting virtual currency as a payment mode. Speculation is said to be the main driver of bitcoin trading. Risk-conscious investors can test the virtual currency as a go-to asset without being a trader or miner (those who record bitcoin transactions to earn bitcoins) themselves. WPCS is one such avenue.

Although the contractor belongs to a different industry, running a bitcoin service is not unusual for a company that is unrelated to financial services and retail. A mining company had ventured into bitcoin mining while a game developer is allowing players to pay in bitcoin to play. WPCS, through BTX Trader, plans to develop more bitcoin services as it serves its traditional customers.

Back in 2008 when Bitcoin was first conceived and began making its entry into the world of currency, there was a great deal of speculation as to whether or not this digital currency could (or would!) take the power of finances away from central banks around the world that have always held the keys to wealth. Over the past 8 years Bitcoins have surged in value from their humble beginnings at a value of $0.01 per coin to over $1200 per coin in 2013 and then back down again to just about half that value where they are currently valued at. Even though this currency is highly speculative, there are those who question whether their slow dominance of the Internet is a good thing – or not. Here are some thoughts on the issue.

Difficult to Use without Being Valued against other Bitcoins

As a peer to peer currency that is really valued by supply and demand, it should also be realized that there are only so many Bitcoins that will ever be made. The supply is finite, which to some, gives them value because of the old ‘supply and demand’ rule of finance. When it comes to wagering on online games such as poker, it becomes difficult to use them as a currency because it is difficult to break them down into smaller units that can be used as a wager and also, hard for ultimate values to be assessed as the value is even more volatile than many of the leading currencies on the market. It is far easier to use a major currency against another major currency than it is a digital currency against a major currency. In short, they are not yet fully understood by the masses and computations are highly complex. Too complex for the average financial transaction online.

The #1 Concern – Digital Anything Is Open to Hackers

Then there is the concern that since Bitcoins are a digital currency, hackers can literally take over a person’s supply with no one being the wiser as they can also create bogus Bitcoins that may be passed as authentic. The current level of online security appears to be inadequate to keep up with the type of security needed for digital currency so the slow dominance of the internet in this regard is actually a good thing. The longer it takes for this particular currency to gain in popularity and use, the longer cyber security teams will have to find ways to secure sites that accept Bitcoin payment.

In the end, the faster anything at all gains dominance over a market, the quicker it can come tumbling down. When people like online gamers are wagering bets, the money they are playing with needs to have real value. There is nothing ‘tangible’ about an online game as there would be such things as ordering articles from an online merchant and with the hopes of winning, that money being wagered becomes all the more important. It’s just that – a wager, a bet. With nothing to say that other digital currencies won’t hit the market, lowering its value and no sure way to protect against hackers at this time, slow dominance is indeed a very good thing.

With internet technology expanding every day it is hard to keep up with the innovative software that keeps popping up on a regular basis. Although Bitcoin was first introduced in 2009; it is still a relatively new player in the online payment system. What makes this internet payment network so special is its uniqueness. It makes it possible to transfer Bitcoin currency from one peer to another quickly and effectively. The processing fees are very low and you can make worldwide payments in minutes. It sounds like we better explore this a little bit further.

It is a digital currency that is bought, sold and transferred between fellow users of the same payment network. The process begins when the prospective member downloads the software to their computer or phone. Once you have completed this process you will receive a Bitcoin address. The address is used to send you payments for goods or services rendered. This currency can also be bought on a market exchange. You can sell your bitcoins at this exchange as well. The unique thing about this payment network is that the currency is decentralized. It is not owned or controlled by any bank or financial institution. It is not insured by the FDIC. It is open to anyone that wants to become a member. More and more merchants are accepting this digital currency for their goods or services. There is no risk and the encryption process is very effective.

You install a wallet on your computer or phone. You receive your new IP address. Then you begin accumulating bitcoins through purchase or transactions. All transactions on the payment network are stored in a Block Chain, which is nothing more than a shared public ledger. Bitcoins are transferred instantly and is verified mathematically by the network. Currency is transferred from one wallet to another quickly, safely, and securely. The Bitcoin mining process is where the transactions are constantly stored in the block chain and then verified by the computer.

The Bitcoin payment network has been around for a while and it is an interesting way to send and receive payments. As more merchants jump on board with this program you will hear more about the Bitcoin system. It may not be as familiar as some payment networks on the internet, but it has the potential of growing into something special. The setup is easy and as long as you know merchants or others that use the network you can find some nice benefits in using this system.

The Bitcoin market has never been stronger and despite pressures from a number of countries like Russia and the US to strictly regulate and refuse to recognize the cryptocurrency, Bitcoin’s value has soared. In fact, the Bitcoin price soared to a record high of $1,800 earlier this month, although some reports are suggesting that it is beginning to slip slightly. People are beginning to worry about the blockchain disrupting trade finance, but with the rise in value we could see Bitcoin becoming a more stable digital currency. With Bitcoin prices having increased by around 81% since the start of 2017 the market is showing some serious strength. Here, we’re taking a look at why the Bitcoin market is reaching such an extensive high.

Comments From The Minneapolis Federal Reserve President

One of the main factors behind the sudden surge in price on Tuesday 9th May was the comments made from the President of the Minneapolis Federal Reserve, Neel Kashkari, about the blockchain technology as a whole. He stated that the technology is more interesting and has more potential than Bitcoin itself. His comments are beginning to be a pinnacle in the industry and is marking yet another influential policy maker who is warming up to the technology. After his comments, the Bitcoin actually rose by 6%.

Availability Of Information

The internet is a huge source of information on a number of topics, but very slowly a number of major news sources and social media channels are beginning to focus on the Bitcoin currency. This has led to a growing interest in the digital currency, as people are able to understand more about how the Bitcoin can benefit them. This is not only through general information, but also with informative sites like Bitcoin Casino Pro who provide in-depth reviews on Bitcoin casinos – which are one of the main things that people spend their Bitcoins on due to their anonymity and fast transaction speeds. The more people understand the value of the Bitcoin and what they are used for, the more people will turn to invest in the digital currency, further boosting its market value.

China’s Currency Devaluation In 2015

Back in November 2015, there was a surge in the value of the Bitcoin which was influenced largely due to China’s currency devaluation. The devaluation took place in order to help mitigate any inevitable capital outflows and stabilize the economy. While China generally ban the Bitcoin currency, all it would take was a number of Chinese citizens to invest in the Bitcoin, even by just a small fraction for the crypto currency to bubble into another all-time high. Speculation of this was quickly confirmed when reports suggested that Bitcoin price was influenced mainly by Chinese exchanges back in 2015 and this could have had an impact in the rise in the Bitcoin value that we have seen throughout 2017 too.

However, China has also begun to clamp down on the Bitcoin, and looking to ban or at the very least strictly regulate the currency – both for trading and the exchanges themselves. In fact, China’sCentral Bank has even warned investors against looking to the currency. While at first glance this may seem like a negative suggestion, the scrutiny that China is putting on the crypto currency (which is similar to Russia’s current stance) could lead to stricter regulations, further helping to steady the market. A more stable Bitcoin market means a potential gateway for investments which will ultimately boost the value of the Bitcoin.

Legalisation Of Bitcoin In Japan

A major influential factor was the recent decision by the Japanese government to legalize the cryptocurrency, and recognize it as a payment method. This led to more Bitcoins being purchased with yen which has led to a major support network for the cryptocurrency. Alongside the legalization of the Bitcoin in the country, a number of regulations are set to be implemented in order to provide users with a lot more security when it comes to using the technology. This is generally due to the concerns about illegal activities using the pseudo-anonymous crypto currency such as money laundering.

However, amendments to the Banking Act and the addition of section 3, which is tentatively being referred to as the ‘Virtual Currency Act’, it is highly likely to see a number of regulations. For example, Bitcoin is classified as an asset, and so any profits from Bitcoin trading will be subject to capital gains tax in the country, but will no longer be subject to consumption tax, which lies at 8 per cent in Japan. Digital exchanges in the country will also have a number of required regulations, including the minimum capital that they need to hold being 10 million yen.

According to the new law, the exchanges will also need to possess an IT system management program which is sufficient enough to protect against issues such as leakage, or loss and damage to any personal funds which the exchanges may hold. In order to protect the users of the exchanges even more, exchanges must also disclose trading name and address, registration number, transaction content, and all fees and costs to their users, showing just how much more secure the Bitcoin and digital currency exchanges are set to be for their users.

This legalisation alone has led to a surge in interest in the crypto currency, with more people seeing Bitcoin as a reliable and regulated digital currency, causing asset managers to jump into the market.

Internal Developments

With the rise in value of the Bitcoin and the increased investor attention, there have been a number of internal developments that are in the process of being carried out in order to help ensure that the Bitcoin maintains its promises of flawless security and usage. One of the initial developments that could potentially be carried out include a way to scale up the system in order to allow it to handle many more transactions. The implementation of the Segregated Witness (SegWit) on the Bitcoin clone currency LiteCoin is an initial step towards this development, meaning we could see much more improvement in the future. If this can be successfully deployed, we are likely to see a huge increase in the value of the Bitcoin in the near future. While there are a number of pros andcons of the Bitcoin, these internal developments could prove a vital step towards market stabilisation.

Winklevoss Proposal

Back in March, The US Securities and Exchange Commission rejected a proposal from the Winklevoss twins, who were looking at a Bitcoin exchange traded fund. Nevertheless, the SEC are considering reviewing this rejection, which could see a further interest from investors in the near future as more developments begin to come to light with the crypto currency. With figures like the Winklevoss twins looking to push Bitcoin into the mainstream, we may see that the rise in value of the Bitcoin isn’t just a temporary thing, and we may begin to see the generally rocky market begin to stabilize with more regulation.

2017 started out for Wall Street investors on a splendid note as stocks posted decent gains in a sharp contrast to the predictions of losses that had trailed DonaldTrump’s unexpected victory in the 2016 elections. Investors were quick in warming up to the idea of a Trump presidency and they loved how his unconventional economic policies could spur growth on Wall Street. The gains on Wall Street were particularly sustained through the first and second quarters as shown in the chart below.

Stock Market And The Dow Jones

The NASDAQ Composite gained 13.10%, the Dow Jones gained 7.38%, and the S&P 500 was up 7.33% in the first two quarters of the year. In fact, investors who had exposures to small cap stocks saw decent 3.65% gains. Interestingly, the VIX Index was down 13% within the same period.

Interestingly, Tyrone Manning, an analyst at Wilkins Finance observes that “the gains in the market don’t appear to be slowing down even as stocks continue to book gains in the as third.” So far in the third quarter, the S&P 500 is up 3.23%, the NASDAQ is up 5.42% and the Dow is up 4.15% and the Russell 2000 is up 4.07% as seen in the chart below.

Stock Market Volatility

More interesting is the fact that stocks have been booking decent gains in the last one month as the volatility index continues to fall in sharp contrast to prevailing geopolitical and economic developments. In the last one month, the S&P 500 gained 2.60%, the Dow Jones Industrial Average gained 2.52%, NASDAQ was up 2.79% and small caps were on soaring with 7.79% gains in the Russell 2000. In contrast, the CBOE S&P 500 Volatility Index (VIX) had crashed to about 12.0% in the last one month to indicate that investors are not anxious about the short-term direction of the market.